An unfavorable variance may be due to poor planning rather than due to inefficiency.

Question

Quizplus · Accepted Answer

An unfavorable variance means that actual results are worse than planned results. This could be due to a variety of factors such as inefficiency, unexpected events, or poor planning. However, it is possible that poor planning may be the root cause of the unfavorable variance. For example, if an organization did not properly anticipate the cost of materials when creating a budget, then actual costs would be higher and result in an unfavorable variance.

An Unfavorable Variance May Be Due to Poor Planning Rather